Market News

Global solar PV market reaches 27.4-GW in 2011, up 40% Y/Y

March 20, 2012 | Paul Buckley | 222904308

Global solar photovoltaic (PV) market installations reached a record high of 27.4 GW in 2011, up 40% Y/Y, according to the annual PV market report, 2012 Marketbuzz issued by NPD Solarbuzz. Market growth overall in 2011 was driven by strong second half demand ahead of further deep cuts in solar incentives.

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This followed a period of over-production in the first half that triggered the sustained price decline through the PV chain that came to characterize 2011. The dominance of Chinese manufacturers in crystallinesilicon wafers, cells and modules grew, the share of thin film declined, and demand in Asian markets grew rapidly.

The PV industry generated $93 billion in global revenues in 2011, up 12% Y/Y, while the industry successfully raised more than $8 billion in corporate equity and debt. Of the more than 100 countries worldwide covered in Marketbuzz, the top five PV markets were Germany, Italy, China, the United States, and France - 74% of global demand in 2011. Chinasoared 470% Y/Y, rising from to third place from seventh in 2010.

European countries accounted for 18.7 GW, or 68% of world demand in 2011, down from 82% in 2010. Strong growth in France and Italy, combinedwith a year-end surge in German demand that held it flat Y/Y, meant that Germany, Italy and France collectively accounted for 82% of the European market.

Worldwide solar cell production reached 29.5 GW in 2011, up from 23.0GW a year earlier, with thin film production accounting for 11% of total production. Production from China and Taiwan accounted for 74% of global cell production, up from 63% in the prior year. The Top 10 polysilicon manufacturers had 204K metric tons per annum of capacity in 2011, while the Top 10 wafer manufacturers accounted for 20.7% of globalcapacity.

The excess of solar cell production over demand during 1H'11 caused market-weighted average crystalline silicon factory-gate module prices to drop 28% in 2011, significantly more than the 14% drop the previous year. Furthermore, Q4'11 versus Q4'10 prices were down 46%. Over the next five years, factory-gate module prices are projected to drop between 43% and 53% from 2011 levels. Average c-Si factory-gate prices in 2012 will be at least 29% lower than the 2011 average.

Over the next 12 months, the Rest of World markets are projected to increase to 32% of global demand, from just 20% last year, while Europe loses share, dropping to 53%. By 2016, European market share is projected to fall below 42% as North America and several Asian markets grow rapidly. China is forecast to reach 17% of the world market by 2016.

Aggressive cuts in incentives in Germany and other European countries have set up the potential for a global market decline in 2012,but ahead of these the rush to install is on, especially in Germany, said Craig Stevens, President of NPD Solarbuzz. These cuts in tariffs will force companies to embrace self-sustaining marketing models earlierthan they expected. Meanwhile, Chinese policy makers will face a decision whether to stimulate their domestic market even more than planned to support their globally dominant manufacturing base.Stevens added, Cutbacks in polysilicon, wafer, and cell production plans before mid-year will be required to avoid further damaging margin declines. Meanwhile, it is significant that polysilicon manufacturing capacity-long the most constrained and profitable part of the PV chain-now has the highest capacity in the PV chain.

The new Marketbuzz report provides an in-depth, integrated analysis of global demand, supply, capacity, and pricing in the solar market supply chain.

Global solar photovoltaic (PV) market installations reached a record high of 27.4 GW in 2011, up 40% Y/Y, according to the annual PV market report, 2012 Marketbuzz issued by NPD Solarbuzz. Market growth overall in 2011 was driven by strong second half demand ahead of further deep cuts in solar incentives.

This followed a period of over-production in the first half that
triggered the sustained price decline through the PV chain that came to
characterize 2011. The dominance of Chinese manufacturers in crystalline
silicon wafers, cells and modules grew, the share of thin film
declined, and demand in Asian markets grew rapidly.

The PV industry generated $93 billion in global revenues in 2011, up
12% Y/Y, while the industry successfully raised more than $8 billion in
corporate equity and debt. Of the more than 100 countries worldwide
covered in Marketbuzz, the top five PV markets were Germany, Italy,
China, the United States, and France - 74% of global demand in 2011. China
soared 470% Y/Y, rising from to third place from seventh in 2010.

European countries accounted for 18.7 GW, or 68% of world demand in
2011, down from 82% in 2010. Strong growth in France and Italy, combined
with a year-end surge in German demand that held it flat Y/Y, meant
that Germany, Italy and France collectively accounted for 82% of the
European market.

Worldwide solar cell production reached 29.5 GW in 2011, up from 23.0
GW a year earlier, with thin film production accounting for 11% of
total production. Production from China and Taiwan accounted for 74% of
global cell production, up from 63% in the prior year. The Top 10
polysilicon manufacturers had 204K metric tons per annum of capacity in
2011, while the Top 10 wafer manufacturers accounted for 20.7% of global
capacity.

The excess of solar cell production over demand during 1H'11 caused
market-weighted average crystalline silicon factory-gate module prices
to drop 28% in 2011, significantly more than the 14% drop the previous
year. Furthermore, Q4'11 versus Q4'10 prices were down 46%. Over the
next five years, factory-gate module prices are projected to drop
between 43% and 53% from 2011 levels. Average c-Si factory-gate prices
in 2012 will be at least 29% lower than the 2011 average.

Over the next 12 months, the Rest of World markets are projected to
increase to 32% of global demand, from just 20% last year, while Europe
loses share, dropping to 53%. By 2016, European market share is
projected to fall below 42% as North America and several Asian markets
grow rapidly. China is forecast to reach 17% of the world market by
2016.

“Aggressive cuts in incentives in Germany and other European
countries have set up the potential for a global market decline in 2012,
but ahead of these the rush to install is on, especially in Germany,”
said Craig Stevens, President of NPD Solarbuzz. “These cuts in tariffs
will force companies to embrace self-sustaining marketing models earlier
than they expected. Meanwhile, Chinese policy makers will face a
decision whether to stimulate their domestic market even more than
planned to support their globally dominant manufacturing base.”
Stevens added, “Cutbacks in polysilicon, wafer, and cell production
plans before mid-year will be required to avoid further damaging margin
declines. Meanwhile, it is significant that polysilicon manufacturing
capacity-long the most constrained and profitable part of the PV
chain-now has the highest capacity in the PV chain.”

The new Marketbuzz report provides an in-depth, integrated analysis
of global demand, supply, capacity, and pricing in the solar market
supply chain.